State regulators have accepted a planning document filed by
PacifiCorp that details how the utility intends to meet customer needs over the
next decade. The utility serves customers in Washington, Oregon, Utah, Wyoming,
California and in eastern Idaho, where, operating as Rocky Mountain Power, it
has about 70,000 customers.

PacifiCorp plans to add more than 1,423 megawatts of
renewable energy and does not include any added coal generation in its plan.

The Idaho Public Utilities Commission requires that
regulated electric utilities file an Integrated Resource Plan (IRP) every two
years. Acceptance of the plan by the commission does not guarantee that it will
approve every project proposed during the 10-year period. “The IRP, as we
continue to note, is a utility planning document that incorporates assumptions
and projections at a point in time. It is the ongoing planning process that we
acknowledge, not the conclusion or results,” the commission said.

PacifiCorp said it will begin to experience a capacity
deficit in 2011 if steps are not taken soon to increase generation and reduce
demand. The utility anticipates a growth rate of about 2.5 percent per year over
the next decade. Further creating the need for more generation is the 2011
expiration of a major power purchase contract with the Bonneville Power Administration.

The vast majority of the 1,423 MW in anticipated new
renewable generation is expected to come from wind (1,313 MW) with the rest
coming from geothermal (35 MW) and major upgrades to existing hydroelectric
facilities (75 MW).

On the conservation side, the utility plans to save just
more than 900 MW from energy efficiency programs and another 105 to 325 MW from
programs where the company remotely reduces demand from customers such as
irrigators and industry during times of peak use. PacifiCorp also plans to add
about 831 MW in gas-fired capacity between 2014 and 2016 and gain 170 MW of
emissions-free capacity from coal plant turbine upgrades.

The company could have been short on capacity as soon as
2010, but took steps to meet increased demand in 2008 by acquiring a 520-MW
natural gas plant in Chehalis, Washington, and adding 175 MW of additional wind
resources.

PacifiCorp anticipates gaining access to more generation
with the completion of its proposed Gateway transmission project, a joint project
with Idaho Power Co. that will transport energy from eastern Wyoming, through
southern Idaho (Gateway West) and through Utah (Gateway South).

Commission staff, which operates independently of the
commission, commended the company for a diverse mix of generation resources,
while adhering to imposed and pending environmental regulation. Staff found it
noteworthy that coal-fired generation does not appear in the company’s
portfolio of future generation sources.

Staff did express concern that the company anticipates a
more than doubling of the wind integration cost assessed wind developers. The
company’s 2007 IRP used a cost of $5.10 per megawatt-hour to integrate wind,
but includes an $11.75 per MWh cost in the current IRP. Staff also said that costs
included by the company to meet mandated renewable portfolio standards in other
states were not adequately quantified.

The IRP was developed through a collaborative and public
process with involvement from state utility commissions, advocacy groups and
interested citizens. The document, including attachments, is available on the
commission’s Web site at www.puc.idaho.gov.
Click on the electric icon, then on “Electric Cases,” and scroll down to Case
No. PAC-E-09-06.